In these times of Amazon, Flipkart and Netflix one may ask 100 common people if they would like to wait for a good dress, film or a consumer product or buy online the chances are that almost all would prefer to buy it instantly. The same is the case of a family that would prefer two minutes Noodle or instant food as a meal to a well-cooked meal at home. Somehow the need for instant gratification overrides the need to wait. It is as if patience and waiting for the reward after putting in adequate time and effort are passé. This has profound implications for setting up future goals and planning for them systematically. Several researches have conclusively proved that such impulsive behaviour is the root cause of financial problems, health disorders and many addictions. On the contrary, the ability to wait for gratification and having the sustenance to delay it results in good academic achievement, sound creditworthiness, better life planning and overall maintaining a balance in life. In this context, I am reminded of a very amusing occurrence that happened in one of the world’s largest banks operating out of India. In the early 70s, the bank went for restructuring and complete reorganisation. It, based on the advice of reputed consultants from the Indian Institute of Management (IIM), divided its operations into seven circles and each circle was to be headed by a Chief General Manager (CGM). It further divided the bank's operations into Planning and Operations (not done earlier) and these two were to be headed by the General Manager- Operations(GMO) and General Manager -Planning(GMP)). The then Chairman of the bank wanted the very best of their senior staff to head the GMP position. But when the appointments were made many from the operations side went to offer their sympathies to the newly appointed GMPs. They were unable to fathom what planning has to do in the bank! The real power lay with operations. Planning calls for looking into the future with a magnifying glass and requires an accurate understanding of the past and the present. Quite a painful exercise. Instant gratification is in the operations. Doing things right now.

We at EcoDev Solutions have been studying this phenomenon of delayed gratification versus instant gratification in the context of small-hold farmers(SHF) mainly from Africa. We have observed that these SHF come from very impoverished backgrounds and often have no collaterals. They are the first lot to be rejected by the Banks and other micro-finance institutions for any kind of loan. Also, the disturbing data available indicates that about 50-55 % are agriculture loan defaults in Africa. Combining these two factors we can conclude that those who actually need the loans are being deprived due to the non-availability of any form of collateral and those who do, do not repay the loans. How then we can ensure that the money goes to the right segment of SHF and agriculture productivity is given a real boost?

One way to tackle this vexed issue is to identify the farmer who has both sound entrepreneurial attributes and creditworthiness. Here again, we have seen that many of those who exhibit a high degree of entrepreneurial abilities may not be creditworthy and likewise exhibiting a high degree of creditworthiness may not have skills to make them succeed in business. On these two pillars, we find four quadrants. Low on Creditworthiness and Low on Entrepreneurship (LCLE), High on Creditworthiness Low on Entrepreneurship (HCLE), Low on Creditworthiness High on Entrepreneurship(LCHE) and High on Creditworthiness and High on Entrepreneurship(HCHE). Based on a comprehensive profiling we figure out if these SHF have the following traits in them.

  • Achievement Motivation(AM)
  • Locus of Control (LC)
  • Need for Dominance (ND)
  • Passion for Work (PW)
  • Self-Efficacy (SE)
  • Need for Inclusion (NI)
  • Need for Control (NC)
  • Need for Affection (NA)
  • Meta Cognition (MC)
  • Fluid Intelligence (FI)
  • Conscientiousness (C)
  • Agreeableness (A)
  • Delayed Gratification.

Based on the psychometric profiling these SHF are put in three categories viz., Champions, Masters and Rookies. A customised business plan is then prepared using a Balanced scorecard template. The profile identifies who, amongst the farmers, has the best chance of repaying their loans and has the ability to execute the business plans successfully. As mentioned earlier we have consistently seen those farmers who are not impulsive and have the patience to wait for the fruition have the best chance to succeed in their enterprise. In addition, non-threatening feedback is provided to the Masters and Rookies to help them graduate upwards.

To sum up we need to understand that in order to succeed in any enterprise one must have the ability to delay gratification and must think like an entrepreneur. A high degree of psychological creditworthiness is an added database for financial institutions to decide who should be assisted. Therefore, no need for instant two-minute noodles let us have a proper well-cooked meal!